FISHER FUNDS KIWISAVER SCHEME
FISHER FUNDS KIWISAVER SCHEME
INVESTMENT STATEMENT & APPLICATION FORM PREPARED AT 1 APRIL 2015 Fisher Funds KiwiSaver Scheme Scheme Provider
2 FISHER FUNDS KIWISAVER SCHEME Important information (The information in this section is required under the Securities Act 1978.) Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Page What sort of investment is this .
6 Who is involved in providing it for me . 6 How much do I pay . 8 What are the charges . 11 What returns will I get?. . 13 What are my risks . 17 Can the investment be altered . 20 How do I cash in my investment . 21 Who do I contact with inquiries about. . 21 my investment? Is there anyone to whom I can complain . 21 if I have problems with the investment? What other information can I obtain. . 22 about this investment? In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of that prospectus on request.
The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand’s financial markets. The Financial Markets Authority’s main objective is to promote and facilitate the development of fair, efficient and transparent financial markets.
For more information about investing, go to http://www.fma.govt.nz Financial advisers can help you make investment decisions Using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions. Financial advisers are regulated by the Financial Markets Authority to varying levels, depending on the type of adviser and the nature of the services they provide. Some financial advisers are only allowed to provide advice on a limited range of products. When seeking or receiving financial advice, you should check: » » the type of adviser you are dealing with; » » the services the adviser can provide you with; and » » the products the adviser can advise you on.
A financial adviser who provides you with personalised financial adviser services may be required to give you a disclosure statement covering these and other matters. You should ask your adviser about how he or she is paid and any conflicts of interest he or she may have.
Financial advisers must have a complaints process in place and they, or the financial services provider they work for, must belong to a dispute resolution scheme if they provide services to retail clients. So if there is a dispute over an investment, you can ask someone independent to resolve it. Most financial advisers, or the financial services provider they work for, must also be registered on the financial service providers register. You can search for information about registered financial service providers at http://www.fspr.govt.nz You can also complain to the Financial Markets Authority if you have concerns about the behaviour of a financial adviser.
This is an Investment Statement for the purposes of the Securities Act 1978.
3 FISHER FUNDS KIWISAVER SCHEME The Fisher Funds KiwiSaver Scheme (“Scheme”) is registered under the KiwiSaver Act 2006 and is provided by Fisher Funds. TSB Bank Limited is involved in marketing and distributing the Scheme only, however, it is not a promoter of the Scheme as defined in the Securities Act 1978. Interests in the Scheme are subject to investment risk including loss of income and principal invested. Neither TSB Bank nor any other person guarantees the interest in the Scheme (including the repayment of any capital or the performance of those securities).
An investment in the Scheme does not represent a deposit with, or other liability of, TSB Bank Limited. More information on these risks is contained in this document. Fisher Funds is the Issuer and Manager of the Scheme and is the company responsible for all statements made in this Investment Statement.
Contents Important information . . 2 Key information summary . . 4 Matters required to be disclosed by the Securities Act 1978 . . 6 Glossary . . 23 So where do I sign . . 25 Application Forms and Direct Debit Authority . . 27 Changing Your Investment Options form. . . 37 Fisher Funds is a common sense investor. Our straightforward investment approach has worked for many years, and more than 250,000 New Zealand investors now benefit from our time tested expertise.
4 FISHER FUNDS KIWISAVER SCHEME Key information summary Key terms Further information For more information What is KiwiSaver? KiwiSaver is a voluntary savings initiative that was set up by the government.
It is designed to help you grow a retirement fund that can help secure the lifestyle you would like to enjoy in later years. See page 6 Who can join the Scheme? To be eligible to join a KiwiSaver Scheme you must be: » » normally living in New Zealand, » » a New Zealand citizen (or entitled to permanent residence), and » » under the New Zealand Superannuation qualification age (currently 65 years of age), unless you are transferring from another KiwiSaver Scheme.
See page 6 What are the benefits? » » The government provides a one-off $1,000 kick-start contribution when you first join KiwiSaver. » » If you are over 18 and below the ‘KiwiSaver Qualifying Age’ (see When can I withdraw my money from KiwiSaver? below), and contributing to a KiwiSaver Scheme account through your salary or wage, your employer will generally also contribute a minimum of 3% (less tax) of your gross salary or wage. » » If you are over 18 (and below the KiwiSaver Qualifying age) you may also receive a member tax credit of up to $521 a year (50 cents for every $1 you contribute up to a maximum of $1,043).
» » You may be entitled to use your KiwiSaver savings to help you buy a first home, and you may also be entitled to a KiwiSaver HomeStart grant.
See pages 8 to 10 and 14 When can I withdraw my money from KiwiSaver? Generally, you will not be able to access your KiwiSaver savings until you reach the KiwiSaver Qualifying Age. This is the New Zealand Superannuation age (currently 65 years of age) or once you have been a member of a KiwiSaver scheme or a complying superannuation fund for five years, whichever is later. In limited circumstances you may be eligible for an early withdrawal of your KiwiSaver savings (which may or may not include the government kick-start contribution or member tax credits). These circumstances include: » » buying your first home; » » significant financial hardship; » » serious illness; » » permanent emigration (other than to Australia); » » death (in which case your KiwiSaver savings will be paid to the executors or administrators of your estate); and » » where any Act or Court order requires a withdrawal to be made.
See pages 13 to 15 Who is the Scheme provider? Fisher Funds Management Limited is the Manager and provider of the Scheme. See pages 6 and 7
5 FISHER FUNDS KIWISAVER SCHEME Key terms Further information For more information What funds can I invest in? All Scheme members can select from three investment strategies (a carefully designed investment mix to suit a specific investor profile) or you can build your own investment strategy by choosing one or a mix of the two individual Funds below. » » Conservative Fund - principally invests in Cash and Fixed Interest securities, but may also invest in Shares, Infrastructure securities and Property securities (in each case locally and/ or internationally).
The Fund invests in a higher proportion of income assets and will have lower potential returns and less volatility than the Growth Fund.
» » Growth Fund - principally invests in growing companies in all or any of the New Zealand, Australian and other international markets. The Fund invests in a higher proportion of growth assets that have the potential for higher returns in the long term but experience more volatility. For help with choosing an investment strategy see pages 32 to 39 of the accompanying Fisher Funds ‘with you all the way’ booklet. See page 6 How much do I have to pay? If you are an employee, you are currently required to contribute from your after-tax salary or wages at the rate of 3%, 4% or 8%. You can change your contribution rate, or make regular or lump sum contributions, at any time.
You can take a contributions holiday at certain times (subject to certain conditions).
If you are self-employed or not working, you can choose the amount that you contribute. There is currently no minimum contribution requirement. You can choose to make regular contributions or lump sum payments to your KiwiSaver Scheme account. See page 8 What are the risks? All investments involve a degree of risk. The potential return on an investment is generally related to the risk of the investment. The key factor that determines your returns is the investment performance of the Fund(s) you are invested in. The performance of a Fund is determined by the Fund’s asset allocation. Generally, Funds that are invested in a higher proportion of growth assets will have the potential for higher returns in the long term but experience more volatility.
Funds that are invested in a higher proportion of income assets will have lower potential returns but have less volatility and therefore have less risk attached to them.
See pages 17 and 18 What are the charges? An administration fee is deducted from your KiwiSaver Scheme account. Each Fund is charged a management fee which is paid to us. A trustee, custody and unit pricing fee is paid to the Trustee. A performance fee may be payable on the Growth Fund only, subject to beating the performance benchmark and other criteria. These fees are deducted from the assets of the Fund. Each Fund may invest in other funds which may charge fees and incur expenses. Both Funds are also charged expenses in respect of the Scheme. See pages 11 to 13 Does anyone guarantee the investment? None of the Crown, Fisher Funds, the Trustee, or any other person or company, guarantees or promises the repayment of, or returns on, investments in the Scheme.
See page 7 Does the Scheme use related parties? There are no related party transactions. Who can I contact for further information? If you have any questions about your account, you can contact your financial adviser (if you have one), email us at email@example.com, call us on 0800 FFKIWI (0800 335494) or write to us at our address. You can also monitor your account and update your personal details via our 24/7 secure online access facility. See page 21
6 FISHER FUNDS KIWISAVER SCHEME What sort of investment is this? This Investment Statement offers membership interests in the Fisher Funds KiwiSaver Scheme (the Scheme), which is a KiwiSaver scheme registered under the KiwiSaver Act 2006.
To be eligible to join a KiwiSaver Scheme you must be: » » normally living in New Zealand, » » a New Zealand citizen (or entitled to permanent residence), and » » under the New Zealand Superannuation qualification age (currently 65 years of age), unless you are transferring from another KiwiSaver Scheme.
Investment Funds The principal purpose of the Scheme is to provide you with retirement benefits. The Scheme has two investment funds, the Growth Fund and the Conservative Fund (each a Fund and together the Funds) and you can choose either of these or a mix of the two. The Growth Fund principally invests in growing companies in all or any of the New Zealand, Australian and other international markets, but may also: » » gain exposure to larger companies by investing in securities such as exchange traded funds or derivatives (in addition to holding Shares in the companies themselves); and » » invest in Infrastructure, Property and Fixed Interest securities.
The Conservative Fund principally invests in Cash and Fixed Interest securities, but may also invest in Shares, Infrastructure securities and Property securities (in each case locally and/or internationally). Currently we have complete discretion when investing the monies held for each Fund. For example, there are no formal benchmark asset allocations, or asset allocation ranges, to achieve the Funds’ investment objectives. This discretion is subject to confining each Fund’s investments to the permitted Asset classes for that Fund, and to the provisions of the Scheme’s Trust Deed and all governing legislation.
We are currently in the process of finalising a revised Statement of Investment Policies and Objectives (SIPO) for the Funds which we intend to come into effect on or about 13 April 2015. Once the SIPO has been approved by the Trustee we will publish it on our website at http://kiwisaver.fisherfunds.co.nz When you invest in the Scheme, your money is pooled with the investments of other members of the Scheme and invested for your retirement.
Units in the Funds Your interest in the Scheme is represented by units in one or both of the Funds (as applicable). The value of the units is not fixed – it varies depending on the value of the relevant Fund’s Assets. Movements in financial markets will affect the price of the units in a Fund, but not the number of units you hold. The value of your units can fall if the value of the Fund’s Assets falls. The unit price for each Fund is worked out on each valuation date by calculating the market value of the Assets of that Fund: » » excluding amounts for which units are to be, but have not yet been, issued; and » » including amounts debited, transferred or withdrawn from accounts for which units are to be, but have not yet been, cancelled; and » » adding any income that is due to be received by the relevant Fund, then deducting all liabilities (including tax, except for tax paid on behalf of members) then dividing by the number of units on issue.
General The Assets of the Scheme are managed by a professional investment manager, Fisher Funds Management Limited (Fisher Funds), and are held by Trustees Executors Limited (the Trustee) which is independent of Fisher Funds. Certain terms in this Investment Statement have defined meanings. The terms, ‘we’, ‘us’ or ‘our’ refer to Fisher Funds Management Limited as the Manager of the Funds. The terms, ‘you’ and ‘your’ refer to any member. Capitalised terms, if not defined elsewhere in this Investment Statement, are explained in the Glossary on pages 23 and 24.
All information and statements made in the Investment Statement are accurate as at the date of this Investment Statement.
Who is involved in providing it for me? The name of the Scheme is the Fisher Funds KiwiSaver Scheme. The Scheme was established by a Trust Deed dated 11 June 2007 and started operating on 1 July 2007. The Scheme’s current Trust Deed is dated 17 August 2012. The Scheme is a defined contribution scheme, which means the amount of an investment, when withdrawn, will depend on the contributions made to the Scheme for your benefit, the returns achieved on those contributions and the tax and fees deducted. Matters required to be disclosed by the Securities Act 1978
7 FISHER FUNDS KIWISAVER SCHEME Fisher Funds’ directors may change from time to time. A list of current directors is available online at www.business.govt.nz/companies. The Trustee The Trustee of the Scheme is Trustees Executors Limited (the Trustee). The Trustee supervises the management and administration of the Scheme and is legally responsible for holding all Scheme assets itself or through nominees. The Trustee’s principal place of business is: Level 5, 10 Customhouse Quay, PO Box 3222, Wellington 6140 and its contact address is: c/- Trustees Executors Limited Level 12 45 Queen Street PO Box 4197 Shortland St Auckland 1140 The Trustee’s address may change from time to time.
Their address is available online at www.trustees.co.nz under “Corporate Trust/Contact our Corporate Trust Team”. The Trustee holds a licence to act as trustee for a range of financial products (including KiwiSaver Schemes) under the Securities Trustees and Statutory Supervisors Act 2011. Their current licence expires on 16 January 2018 and is subject to reporting conditions. No guarantee None of the Crown, Fisher Funds, the Trustee or any other person guarantees the performance or obligations of the Scheme or any Fund.
In particular, there is no Crown guarantee of any KiwiSaver Scheme, or of any investment product of a KiwiSaver Scheme. Responsible investment Responsible investment, including environmental, social, and governance considerations, is not taken into account in the investment policies and procedures of the Scheme. In managing the Growth Fund (and managing the allocations to Shares from time to time within the Conservative Fund) we are focussed on identifying and investing in great companies. We find that managers of those companies are increasingly aware of environmental, social and governance issues and factor those into their decision-making as they become more important to their shareholders, employees and wider community.
We consider management’s ability to conduct its business in a responsible way as part of our process of identifying companies in which to invest. We find that consistently good companies seldom achieve that status without satisfying their responsibilities to their staff, clients, community and environment. The Manager The Manager of the Scheme is Fisher Funds, an investment management company established in 1998 by Carmel Fisher. We use our investment expertise to select and manage the Assets held by the Scheme. We may also appoint other, external, investment managers if we consider this to be in the best interests of the Scheme and its members.
We issue membership interests in the Scheme and are legally responsible for the management and administration of the Scheme. We are also the promoter of the Scheme. Our principal activity is managing the investments for the Scheme, the Fisher Funds range of unit trusts, Kingfish Limited, Barramundi Limited, Marlin Global Limited and a number of wholesale investors. Our registered office and street address is: Fisher Funds Management Limited Level 1, Crown Centre 67 – 73 Hurstmere Road Takapuna Auckland 0622 Our address may change from time to time but the current address is always available online at www.business.govt.nz/companies.
We have delegated to the Securities Services Division of Trustees Executors Limited the performance of certain administration management functions for the Scheme. Trustees Executors Limited (whose address is set out under ‘The Trustee’ below) therefore acts as an administration manager of the Scheme. All investment and withdrawal applications and other correspondence should be forwarded to: Fisher Funds Management Limited c/o Securities Services Division Trustees Executors Limited PO Box 409 Wellington 6140 Directors of Fisher Funds The directors of Fisher Funds Management Limited are: » » Carmel Fisher BCA, CFIP » » Hugh Fisher » » Frank Jasper » » Sir John Wells KNZM, ACA, FCIS, FCCM » » Kevin Murphy CA » » Anne Blackburn MA » » Lib Petagna BCA » » James Hill FCA (UK) CA (NZ) The principal address of Carmel Fisher, Hugh Fisher, Frank Jasper, Sir John Wells, Anne Blackburn and James Hill is in Auckland.
The principal address of Kevin Murphy and Lib Petanga is in New Plymouth and Wellington respectively. Each of the Directors may be contacted at the address of Fisher Funds (shown above).
8 FISHER FUNDS KIWISAVER SCHEME We take a similar view when choosing Fixed Interest securities. It is essential that bond issuers can repay their debts. Entities with a sustainable business model as well as a strong balance sheet are better placed to meet their repayment obligations. We think management teams must consider and respond to social and environmental responsibilities to ensure the long term future of their businesses. How much do I pay? Contributions required – employees Your contribution rate You can choose to contribute to the Scheme an amount equal to 3%, 4% or 8% of your gross Salary or Wages.
If you do not make a choice, your required contribution rate will be 3%.
For contribution purposes, Salary or Wages is as defined in the KiwiSaver Act, but generally means your employment-related gross income including: » » overtime, bonuses and allowances (other than accommodation benefits, and any taxable allowances for accommodation or living costs overseas) but excluding exempt income payments, employer superannuation contributions and redundancy payments; » » parental leave payments out of public money; and » » ACC compensation. Your contributions will be deducted by your employer from your after-tax Salary or Wages and paid to Inland Revenue, which then pays them to the Scheme.
If no tax deductions are required to be made from your Salary or Wages under the PAYE rules (and you are not a private domestic worker) then you are not required to contribute to your KiwiSaver Scheme account from Salary or Wages.
Contributions from your employer If you are 18 or more years of age and have not reached your Qualifying Date (see the Glossary at page 23), then (except as outlined right) your employer must contribute to your KiwiSaver Scheme account for your benefit while you are contributing from Salary or Wages. The compulsory minimum employer contribution rate is a before-tax amount equal to 3% of your Salary or Wages (excluding, for this purpose, parental leave payments out of public money and ACC compensation). Ongoing contributions by your employer to an existing registered superannuation scheme for your benefit will count towards your compulsory employer contribution entitlements if your employer provided employees with access to that existing scheme on 17 May 2007 and: » » your employer employed you before 1 April 2008, and before then made (or agreed to make) contributions to the existing scheme for your benefit; or » » you are covered by a collective agreement that was in force before 17 May 2007 and has yet to expire, under which your employer is required to contribute to the existing scheme for your benefit.
The employer’s contributions to the existing scheme will only count as compulsory employer contributions to the extent that they vest within five years after being paid. Employer contributions or credits to an existing registered superannuation scheme for your benefit will also discharge or count towards your compulsory employer contribution entitlements in certain other limited circumstances prescribed in the KiwiSaver Act. All employer contributions to KiwiSaver Schemes are taxed when paid (see Tax on contributions on page 17). Contributions required – people who are self-employed or not employed If you are under 65 and self-employed (e.g.
a sole trader running your own business), or are not working, you may contribute by completing the Application Form on page 27 and: » » sending a personal cheque to Fisher Funds Management Limited c/o Securities Services Division, Trustees Executors Ltd, PO Box 409, Wellington, 6140 (please make your cheque payable to Fisher Funds KiwiSaver Scheme and cross it Account Payee Only); » » by regular direct debit (please complete the Direct Debit Authority on page 35 - the minimum payment amount regardless of frequency is $10); or » » by Internet banking (Fisher Funds’ bank account number is 02-0500-0799760-01.
Enter your Fisher Funds account number (if known) or your name and IRD number as references).
If you are an employee at one workplace (despite being self-employed at another) then you are an employee for the purposes of the KiwiSaver Act. You will be required to contribute to the Scheme at not less than the prescribed minimum rate (see Your contribution rate on page 8) out of your Salary or Wages from that employment. KiwiSaver and children/minors If you are under 18 you can join KiwiSaver without having to contribute, and there is no minimum annual contribution required, unless you are employed. If you are employed then you must contribute from your Salary or Wages at not less than the prescribed minimum rate (see Your contribution rate on page 8) until such time as you are eligible for a contributions holiday.
Employers are not required to make compulsory employer contributions on behalf of under 18s. Please note that children/minors do require an IRD number and that: » » persons aged under 16 may only be enrolled into a KiwiSaver Scheme by all their legal guardians (acting jointly) and may not enrol themselves; and » » persons aged 16 or 17 must co-sign with one legal guardian in order to enrol into a KiwiSaver Scheme, unless they have no legal guardian. The Application Forms contain these requirements.
9 FISHER FUNDS KIWISAVER SCHEME » » direct to the Scheme by Internet banking (Fisher Funds’ bank account number is: 02 0500-0799760-01. Enter your Fisher Funds account number (if known) or your name and IRD number as references). Direct lump sum investments must be made in amounts of at least $100. The minimum direct debit amount is $10 per payment. We accept voluntary contributions to the Scheme on the assumption that they are cleared funds. Investments may be processed prior to positive confirmation that funds have cleared through the banking system. Should a cheque or direct debit be dishonoured we must immediately sell the units purchased.
If the unit price has decreased between when you invested and when your contribution is dishonoured, you will incur the shortfall. All employer contributions to a KiwiSaver Scheme (both compulsory and voluntary) must be paid via Inland Revenue, which then pays them to that KiwiSaver Scheme.
Transfers from other KiwiSaver Schemes You may only be a member of one KiwiSaver Scheme at a time. You may transfer your benefit from (and cease to be a member of) another KiwiSaver Scheme at any time. Transfers from UK or Australian schemes The Scheme is approved as a qualifying recognised overseas pension scheme (QROPS) under UK legislation. Fisher Funds is therefore permitted to accept, and is accepting, transfers to the Scheme from UK pension schemes. You are permitted to transfer funds from an Australian complying superannuation scheme to a KiwiSaver Scheme which offers that facility if you have permanently emigrated or returned to New Zealand.
Fisher Funds offers the transfer facility. Transfers to a KiwiSaver Scheme from a foreign scheme (other than an Australian complying superannuation scheme) are treated as withdrawals from the foreign scheme and are potentially subject to New Zealand tax. They may also affect your student loan repayments. If you are considering making a transfer from a UK pension scheme into the Scheme, you should consult your tax adviser. You are able to make a withdrawal from the amount transferred to the Scheme to pay any tax liability or additional student loan repayment obligations that arise solely as a result of the transfer.
You will need to apply to us within two years of the transfer to make such a withdrawal, and you should be aware that in some circumstances the withdrawal may trigger a UK tax liability.
For more information about transfers from UK or Australian schemes, call us on 0800 FFKIWI (0800 335494) or visit our website (http://kiwisaver.fisherfunds.co.nz). State sector employees If you are a state sector employee who is already contributing to a state sector superannuation scheme, you can still join the Scheme. You will be required to contribute to the Scheme an amount equal to 3%, 4% or 8% of your gross Salary or Wages. Your contributions will be deducted by your employer from your after-tax Salary or Wages and paid to Inland Revenue, which will then pay them to the Scheme.
If you are in this category then if you join a KiwiSaver Scheme you will not be able to receive additional employer contributions over and above any that continue being made to your existing superannuation scheme.
Inland Revenue holding account If the Scheme is the first KiwiSaver Scheme that you join, then contributions received by Inland Revenue during the three month period after the earlier of: » » the date when the first Scheme contribution for your benefit is received by Inland Revenue; and » » the date when Inland Revenue is given notice (or otherwise knows) that you are a member of the Scheme, will generally not be passed on to the Scheme until as soon as practicable after the end of that three month period. During that period, your contributions will be held by Inland Revenue in an interest-bearing holding account.
On an ongoing basis, contributions paid through Inland Revenue will also be held in that interest-bearing holding account, but paid to the Scheme as soon as practicable after Inland Revenue receives them. Additional contributions You may also: » » contribute amounts additional to those deducted from your Salary or Wages; and/or » » arrange for other persons, including your employer, to make additional contributions for your benefit. Additional contributions (other than employer contributions) may be paid: » » to Inland Revenue by Internet banking (details on how to make these payments are provided on the Inland Revenue website, www.ird.govt.nz); or » » direct to the Scheme by cheque, payable to Fisher Funds KiwiSaver Scheme at: Fisher Funds Management Limited, c/o Securities Services Division, Trustees Executors Limited, PO Box 409, Wellington, 6140; or » » direct to the Scheme by direct debit, through selecting this option on your Application Form and returning an attached Direct Debit Authority form to Fisher Funds Management Limited, c/o Securities Services Division, Trustees Executors Limited, PO Box 409, Wellington, 6140; or
10 FISHER FUNDS KIWISAVER SCHEME Government subsidies Kick-start Contribution Amount (kick-start) If this Scheme is the first KiwiSaver Scheme you join, the Government will make a kick-start contribution of $1,000 to your KiwiSaver Scheme account for your benefit approximately three months after the earlier of the date when Inland Revenue receives your first contribution to the Scheme and the date when Inland Revenue is notified, or otherwise knows, that you are a member of the Scheme. Alternatively, if you have transferred a locked in balance to the Scheme from a Complying Superannuation Fund and were a member of that Complying Superannuation Fund for three or more months, the kick-start will be paid to the Scheme as soon as practicable after Inland Revenue is notified of the transfer.
If you have split your contributions between the Growth Fund and the Conservative Fund, then any kick-start contribution paid to the Scheme will be applied to purchase units in each Fund in the same proportions as the contributions split in place when the kick-start is received. See What returns will I get? on pages 13 to 15 for the restrictions on withdrawing your kick-start. KiwiSaver Member Tax Credit While you contribute to the Scheme and reside mainly in New Zealand you will be eligible (if you are aged between 18 and your Qualifying Date) for an annual Government contribution (called a KiwiSaver Member Tax Credit) matching your contributions to the Scheme at the rate of 50 cents per dollar up to a maximum KiwiSaver Member Tax Credit of $521.43 a year (which equals $10 a week).
This means that you will maximise your KiwiSaver Member Tax Credit entitlements by contributing to the Scheme not less than $1,042.86 a year (which equals $20 a week). A year for KiwiSaver purposes is 1 July to 30 June. The KiwiSaver Member Tax Credit will be available to you regardless of your employment status. Your KiwiSaver Member Tax Credit entitlements will commence on the earlier of the date when a KiwiSaver account is first opened for you and the first day of the month when (as applicable): » » deductions from your Salary or Wages start; or » » your KiwiSaver Scheme provider receives your first contribution; or » » Inland Revenue receives the first contribution paid for your benefit.
This means that if you join KiwiSaver part way through a KiwiSaver year (1 July to 30 June) then your KiwiSaver Member Tax Credit entitlements for that year will be calculated based on the proportion of the year that you were a member. We will claim a KiwiSaver Member Tax Credit annually on your behalf. When you withdraw from the Scheme (unless you are transferring to another KiwiSaver Scheme, in which case the provider of that other scheme may claim the KiwiSaver Member Tax Credit on your behalf) we will be able to claim for your benefit a KiwiSaver Member Tax Credit for the period from the start of the relevant KiwiSaver year.
If after you have withdrawn from the Scheme without transferring to another KiwiSaver Scheme (or by reason of death or Serious Illness) it would be impracticable to pay any outstanding KiwiSaver Member Tax Credit entitlement to the Scheme, Inland Revenue may pay it directly to you (or to your estate following your death). If you have split your contributions between the Growth Fund and the Conservative Fund, then when each KiwiSaver Member Tax Credit payment is received it will be applied to purchase units in each Fund in the same proportions as the contributions split in place when the KiwiSaver Member Tax Credit payment is received.
Your KiwiSaver Member Tax Credit entitlement from the Scheme for a year will reduce to the extent of any KiwiSaver Member Tax Credit already paid to a Complying Superannuation Fund for the benefit in respect of the same year. No KiwiSaver Member Tax Credits are payable in respect of funds transferred to KiwiSaver Schemes from Australian complying superannuation schemes. See What returns will I get? on pages 13 to 15 for the restrictions on withdrawing your Tax Credit Amount (see the Glossary at page 24). Alteration of contributions If you are an employee then you may change your contribution rate between 3%, 4% and 8% by notifying your employer of the new rate (which will apply to the next payment of Salary or Wages after your employer receives that notice).
You cannot change your contribution rate at intervals of less than three months unless your employer agrees.
Dividing contributions (and your KiwiSaver Scheme account balance) between Funds You can elect to have your contributions invested in the Growth Fund, the Conservative Fund or any mix of the two. A default Balanced strategy is provided if you do not select a mix. This is currently a 45%/55% split of contributions between the Growth Fund and the Conservative Fund respectively, but we may alter the default allocation from time to time. Your initial selection is not locked in. At any time (but no more than twice per financial year of the Scheme), you can: » » change the percentage of each contribution paid to the Scheme for your benefit that will go to one or both of the Funds (as applicable); and/or » » switch all or a percentage of your current balance in a Fund to the other Fund (or switch your chosen investment strategy).
11 FISHER FUNDS KIWISAVER SCHEME Entry and Exit fees There are no entry or exit fees for investments in the Scheme. Administration fee Fisher Funds (and/or the Securities Services Division of Trustees Executors Limited, to which Fisher Funds has delegated the performance of certain administration management functions for the Scheme) are reimbursed from the Scheme’s Assets for the day-to-day administration of member accounts and maintaining the member registry for the Scheme. The fee for new joiners is $3.00 per month per member. The fee is paid monthly by redeeming some of your units. The administration fee is plus GST (if any), but we have been advised that no GST is currently payable on this fee.
In each case, you must notify us in writing, by completing and returning the Changing Your Investment Options Form on page 37. Subject to the KiwiSaver Act’s requirements, under the Scheme’s Trust Deed a switch between Funds or investment strategies may be deferred if (and for as long as) we determine after consulting the Trustee that, an earlier switch: » » would be imprudent or impracticable; or » » would otherwise be prejudicial to the interests of the Scheme members (or investors in the relevant Fund or Funds) as a whole. Contribution Holiday If contributions to the Scheme are being deducted from your Salary or Wages, then under the KiwiSaver Act you may apply to Inland Revenue to suspend your contributions to the Scheme (i.e.
to take a Contribution Holiday) if: » » 12 or more months have passed since your first contribution was received by Inland Revenue, or since you first contributed direct to a KiwiSaver Scheme; or » » you are suffering, or likely to suffer, financial hardship (and Inland Revenue has received at least one contribution from you). Fee Type Conservative Fund Balanced Strategy Growth Fund Entry Fee Nil Nil Nil Exit Fee Nil Nil Nil Administration Fee $3 per member per month Management Fee 0.85% p.a. 0.895% p.a. 0.95% p.a. Performance Fee Nil 10% of returns in excess of Official Cash Rate + 5% subject to a High Water Mark (payable on the assets invested in the Growth Fund portfolio only) 10% of returns in excess of Official Cash Rate + 5% subject to a High Water Mark Trustee, Custody and Unit Pricing Fee Up to 0.10% p.a.
Switch Fee Up to two free switches per annum Other Scheme Costs Reporting and other costs incurred by the Scheme If a Contribution Holiday is granted based on financial hardship, its duration will be three months (unless Inland Revenue agrees to a longer period). The duration of a Contribution Holiday will otherwise be between three months and five years. Inland Revenue will notify you before your Contribution Holiday ends and you may apply for a new Contribution Holiday. You may resume contributing at any time by giving notice to your employer, requiring the employer to start making deductions from your Salary or Wages.
If you have been automatically enrolled in the Scheme by your employer (by virtue of them having elected the Scheme as their preferred KiwiSaver Scheme provider) you can opt out of KiwiSaver between two and eight weeks after first joining. If you don’t opt out, you will remain a Scheme member and deductions will continue to be made from your pay.
What are the charges? The fees and expenses payable in each Fund and under the Balanced Strategy are summarised in the table below. Each fee excludes GST if any. You will not be required to pay any additional money towards fees and expenses. All costs, except for the monthly Administration Fee, which is deducted from your account, will be deducted directly from the Scheme’s assets and reflected in the unit price for each Fund and any quoted returns.
12 FISHER FUNDS KIWISAVER SCHEME Management fee We are entitled to be paid management fees, based on the gross asset value of each respective Fund within the Scheme, for the investment services that we provide to the Scheme.
Each management fee is calculated daily, paid to us each month and deducted from unit prices. The annual management fee paid from the Assets of each Fund is: » » Growth Fund – 0.95% per annum of the gross asset value of the Fund; and » » Conservative Fund – 0.85% per annum of the gross asset value of the Fund.
No GST is currently payable on these fees. We may pay your adviser, a distributor or another intermediary a portion of our management fee. These payments are not an additional cost to members. Your adviser must provide you with details of this remuneration. Any financial adviser is acting as your agent, and not as agent for us or the Trustee. Neither we nor the Trustee is responsible for the advice given by these advisers. Growth Fund performance fee We are also entitled to be paid a performance fee on the Growth Fund equivalent to 10% of any return that is in excess of the Official Cash Rate (OCR) plus 5%, multiplied by the Growth Fund’s average net asset value during the calculation period (1 July to 30 June).
This fee is calculated and payable within 3 days of 30 June each year. The fee is subject to a cap of 2% per annum of the Growth Fund’s average net asset value, is accrued in the daily unit price and is deducted from the Assets of the Growth Fund.
No GST is currently payable on a performance fee if it arises, however this may change if legislation is amended to make services provided to KiwiSaver schemes subject to GST. A High Water Mark applies to ensure that we are only rewarded for investment performance once. High Water Mark refers to the restriction placed on payment of the performance fee by including a provision in the performance fee calculation that no performance fee is paid to the extent that we are recovering any losses that may have been incurred by the Growth Fund. The High Water Mark is generally the highest Growth Fund unit price on which any previous performance fee was paid (adjusted for capital movements such as a split of units).
However, where the 2% performance fee cap has applied in the immediately prior calculation period, the High Water Mark will be set at the performance level at which the cap was triggered (and not at the highest closing unit price). This is to reflect the fact that Fisher Funds did not receive any performance fee in excess of the cap, while ensuring that Fisher Funds is not rewarded for the same performance twice. For full details of the performance fee calculation see the registered Fisher Funds KiwiSaver Scheme Prospectus.
Trustee’s fee The Trustee is entitled to receive a fee of up to 0.04% per annum (on which no GST is currently payable) of the gross asset value of the Scheme for trusteeship services. This fee is calculated daily and paid to the Trustee each month, and deducted from the Assets of the Fund(s). Custodial and other administration fees T.E.A. Custodians Limited (a related company of Trustees Executors Limited) has been nominated by the Trustee as custodian and performs the custodial functions for the Scheme. We have also delegated the performance of certain administration management functions for the Scheme to the Securities Services Division of Trustees Executors Limited.
For the performance of those services Trustees Executors Limited, in its capacity as custodian and administrator for the Scheme, is entitled to receive a fee of up to 0.06% per annum of the gross asset value of the Scheme (plus a further $10,000 per annum). The aggregate fee is calculated daily and paid each month, and deducted from the Assets of the Fund(s). The fee of 0.06% per annum is split across the Growth Fund and the Conservative Fund on a pro rata basis, and the additional $10,000 (which is an accounting fee) is split equally between the Growth Fund and the Conservative Fund. No GST is currently payable on the administration component of that fee if it arises, however this may change if legislation is amended to make services provided to KiwiSaver schemes subject to GST.
No switching fee At any time up to twice per financial year of the Scheme, by completing and returning the Changing Your Investment Options Form on page 37, you can: » » change the percentage of the contributions payable to the Scheme for your benefit that will go to one or both Funds (as applicable); and/or » » switch all or a percentage of your current balance from one Fund to another Fund (or switch your chosen investment strategy). No change or switch fees are payable. Expenses payable from Scheme assets The Trustee will pay directly from the Assets of the relevant Fund (or, if they were initially paid by us, we may, subject to the Trust Deed, be reimbursed from those Assets for) costs incurred by us in discharging our obligations as Manager and acquiring or dealing with investments (for example fees for legal and taxation advice, audit fees, printing, postage, brokerage and third party research).
Some international share brokers allow a portion of the brokerage paid by the Funds to be used by us to purchase independent macro- economic and industry analysis as well as research on prospective companies in which the Assets of a Fund might be invested. This type of commission is only used for the purchase of research and research tools to benefit members in the relevant Fund.
However, no Assets of either Fund may be used to pay our own costs or expenses.
13 FISHER FUNDS KIWISAVER SCHEME What returns will I get? Payment of returns Your returns from the Scheme will be paid as a lump sum or lump sums, either upon request after you reach your Qualifying Date or when you make any earlier Permitted Withdrawal. Withdrawals are not otherwise allowed, and the Scheme will not make income distributions. We are legally liable to pay your returns. You should be aware that no rate of return has been promised or guaranteed for the Scheme or either of the Funds, and that the unit prices will rise and fall as the value of each Fund’s underlying investments rises and falls.
Key factors The amount of any return is not quantifiable as at the date of this Investment Statement, as investment returns are by their nature variable. The key factors that determine the returns to you are increases and decreases in the value of the assets in your Fund(s), any income those assets earn, the movements in the markets relevant to your Fund(s), the fees and expenses charged and your tax liability. The total of the returns that may be allocated to you is therefore unknown as at the date of this Investment Statement. Other factors that impact returns are investment duration, market conditions on withdrawal, whether regular contributions have been maintained, tax impacts, fees and entitlement to any KiwiSaver Member Tax Credits.
Withdrawals If you have split your contributions between the Growth Fund and the Conservative Fund, then any partial withdrawal will be made from the Funds in the same proportions as the contributions split in place at the time of withdrawal (unless the balance in either Fund is insufficient to make up the relevant portion of the withdrawal amount, in which case the shortfall will be withdrawn from your balance in the other Fund). We have delegated to the Securities Services Division of Trustees Executors Limited the functions of processing withdrawal applications and determining whether benefits are payable (except in relation to significant financial hardship and serious illness- based withdrawal applications, which the Trustee is responsible for considering), calculating and paying benefits, arranging for contributions splits and switches between Funds and arranging for transfers to other KiwiSaver Schemes.
Each withdrawal facility is described below. In each case, your Tax Credit Amount cannot be withdrawn: » » unless you (or on your death, your personal representative or the permitted recipient of your death benefit) provide a statutory declaration as to when you have resided principally in New Zealand; or » » to the extent to which the Manager has notice that your claim for the Tax Credit Amount is wrong (because the periods during which you have met that residency requirement were wrongly advised).
The Trustee is also entitled (subject to certain restrictions prescribed in the Trust Deed) to be reimbursed from the Assets of the Scheme for costs incurred by it in discharging its obligations as Trustee under the terms of the Trust Deed.
If the Scheme or either of the Funds terminates, neither we nor the Trustee is entitled to receive a fee for any time spent on matters relating to the termination. From time to time accruals for known expenses such as audit fees may be deducted from the Assets of each Fund.
The costs and expenses recovered from each Fund each year are reported in the Scheme’s financial statements, of which you may request a free copy (see page 22). Changes to fees The fees charged for the Scheme must comply at all times with reasonable fees restrictions prescribed in the KiwiSaver Act and the KiwiSaver Scheme Rules. Under the KiwiSaver Act, if a member or the Financial Markets Authority considers that a fee imposed in connection with a KiwiSaver Scheme is unreasonable then he or she may (within one year of the fee being imposed or debited) seek a High Court order annulling or reducing the fee.
Under the KiwiSaver Act, when any fee to which the reasonable fees restrictions apply is increased, the Financial Markets Authority must be notified as soon as reasonably practicable after the increase takes effect. Subject to those reasonable fees restrictions: » » the Trustee and Fisher Funds may alter the Trustee’s fee, or the fees payable to the Securities Services Division of Trustees Executors Limited for the custodial and administration-related services provided to the Scheme or either Fund, by agreement at any time; and » » we may, with written notice to the Trustee, alter our fees or charge other fees from time to time; but members to whom any increased or new fee will apply must be given at least 60 business days’ prior written notice of any increase to fees.
Fees can be altered without amending the Trust Deed.
Total Fund Fees A common way for people to compare the expenses of different schemes or funds is to use the Total Fund Fees (TFF). The TFF is not a separate fee, but a means of showing all fees and expenses (excluding performance fees) as a percentage of average fund size. To check the latest TFFs please refer to our website http://kiwisaver.fisherfunds.co.nz/kiwisaver-faqs or by calling 0800 FFKIWI (0800 335494).